Mark Rowe v Sport Aircraft Association of Australia

[2015] FWC 1341

[2015] FWC 1341

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.394—Unfair dismissal

Mark Rowe
v
Sport Aircraft Association of Australia
(U2014/11936)

DEPUTY PRESIDENT LAWRENCE SYDNEY, 10 MARCH 2015

Application for relief from unfair dismissal.

Introduction

[1] An application pursuant to s.394 of the Fair Work Act 2009 (the Act) for a remedy for unfair dismissal was lodged with the Fair Work Commission (the Commission) by Mr Mark Rowe (the Applicant) against his former employer the Sport Aircraft Association of Australia (the Respondent) on 21 August 2014.

[2] The Applicant was employed by the Respondent in October 2010 as “General Manager”. He had been a contractor from April 2009. He was dismissed on 31 July 2014 and the dismissal took effect the next day.

[3] In his F2 form the Applicant sought reinstatement and the maximum compensation. However, the Applicant ultimately sought only compensation as the remedy. The Respondent alleged that various payments had been made to the Applicant over and above his legal entitlements. This was denied by the Applicant.

[4] The Applicant received a letter from the Respondent on 30 May 2014 directing him to take leave. He was instructed to return the Respondent’s property and he did. The property included mobile phone and credit card. On 14 July 2014 the Applicant received a letter from the Respondent advising that an investigation had been completed and containing the findings. Prior to this, the Applicant says that these issues were not raised with him and he had no opportunity to respond. The letter was a “show cause” letter putting the Applicant on notice of his possible termination. The Applicant was provided with further particulars by email on 15 July. On 18 July a teleconference was held between the Applicant and the Respondent’s representative. The Applicant was supported by Brian Hunter, the past president of the Respondent. Further details of the allegations were requested. Some of this was provided but some was not. On 30 July the Applicant formally responded to the allegations. On 31 July the Applicant received a letter terminating him without notice. He submits that there was no valid reason for the termination and that the investigation was a sham.

[5] The 31 July termination letter was signed by the President and Secretary of the Respondent, Mr J. Clowes and Mr P. Hale respectively. It states that the principal allegations against the Applicant were:

● That he had advances through a clearing account of $79,322.91;

● Overpayment of salary of $28,234.15;

● Misuse of the Respondent’s credit card for personal purchases;

● Overcharging of motor vehicle costs.

[6] The letter referred to the extensive financial documentation that had been provided to the Applicant during the investigation. It also refuted the Applicant’s defence that he had been authorised by the Respondent’s Executive to conduct financial affairs in the manner alleged. His termination took effect on 1 August 2014 and he was paid his annual leave entitlements only.

[7] The letter of 30 May did not set out the allegations against the Applicant. However, it should have been clear to the Applicant that there were serious issues to address. He would be disciplined if he did not comply with the direction not to attend to work issues. It was also specified that there would be an investigation into serious allegations against him.

[8] The Respondent is a voluntary organisation of aviation enthusiasts supporting the building, flying of experimental aircraft and private leisure flight. Its head office is not located in Narromine in Western New South Wales. It had three employees at the time of the Applicant’s dismissal.

[9] In its F3 response, the Respondent submitted that the dismissal was consistent with the Small Business Fair Dismissal Code. It also submitted that the Applicant was dismissed because of serious misconduct as provided for in Regulation 1.07 of the Fair Work Regulations 2009 which provides:

“1.07 Meaning of serious misconduct

(1) For the definition of serious misconduct in section 12 of the Act, serious misconduct has its ordinary meaning.
(2) For subregulation (1), conduct that is serious misconduct includes both of the following:

(a) wilful or deliberate behaviour by an employee that is inconsistent with the continuation of the contract of employment;
(b) conduct that causes serious and imminent risk to:

(i) the health or safety of a person; or
(ii) the reputation, viability or profitability of the employer’s business.

(3) For subregulation (1), conduct that is serious misconduct includes each of the following:

(a) the employee, in the course of the employee’s employment, engaging in:

(i) theft; or
(ii) fraud; or
(iii) assault;

(b) the employee being intoxicated at work;
(c) the employee refusing to carry out a lawful and reasonable instruction that is consistent with the employee’s contract of employment.

(4) Subregulation (3) does not apply if the employee is able to show that, in the circumstances, the conduct engaged in by the employee was not conduct that made employment in the period of notice unreasonable.

(5) For paragraph (3)(b), an employee is taken to be intoxicated if the employee’s faculties are, by reason of the employee being under the influence of intoxicating liquor or a drug (except a drug administered by, or taken in accordance with the directions of, a person lawfully authorised to administer the drug), so impaired that the employee is unfit to be entrusted with the employee’s duties or with any duty that the employee may be called upon to perform.”

[10] Some further detail of the motor vehicle expenditure is provided - unauthorised expenditure of $35,642.63 over four years.

[11] The Respondent agreed, essentially, with the Applicant’s account of the way in which the allegations were dealt with but it notes that the alleged irregularities were uncovered through an independent financial audit.

[12] The matter was allocated to me as part of the regional roster. I conducted a programming teleconference on 28 October 2014.

[13] The matter was then set down for hearing in Sydney on 16 and 17 December 2014.

[14] I conducted a further telephone conference on 9 December to finalise the conduct of the hearing.

[15] An order for production of documents against the Respondent was issued by me on 26 November 2014 on the application of the Applicant. The order sought copies of all minutes etc. of the Respondent relating to the Applicant’s employment and copies of all correspondence, emails etc. of each of the Respondent’s Executive who were also witnesses in relation to the Applicant. Given the volume of material, a debate took place about the format of the documents to be provided. This was resolved by agreement during the 9 December telephone conference.

[16] At the hearing, the Applicant was represented by Mr A. Bland, solicitor and the Respondent was represented by Mr G. Power, solicitor. Both were granted permission to appear pursuant to s.596 of the Act.

[17] The Applicant relied on oral submissions and evidence and:

● His witness statement (Exhibit B1)

● Witness statement of Brian Hunter, former President of the Respondent (Exhibit B3)

[18] The Respondent relied on oral submissions and evidence and:

● Witness statement of Jarrod Clowes, the Respondent’s National President (Exhibit P9)

● Witness Statement of Martin Ongley, the Respondent’s past President (Exhibit P10)

● Witness Statements of David Young, Partner, Azimuth Partners (Exhibits P11 and P12)

● Witness Statement of Phil Hale, the Respondent’s past Secretary (Exhibit P13)

● Witness Statement of Andrew Baldry, the Respondent’s past Treasurer (Exhibit P14)

[19] Oral evidence was completed on 17 December 2014. By agreement, submissions were lodged in writing as follows:

● Applicant, 10 February 2015;

● Respondent, 20 February 2015;

● Applicant in reply, 6 March 2015.

Protections from Unfair Dismissal

[20] An order for reinstatement or compensation may only be issued where I am satisfied the applicant was protected from unfair dismissal at the time of the dismissal.

[21] Section 382 sets out the circumstances that must exist for the applicant to be protected from unfair dismissal:

“382 When a person is protected from unfair dismissal

A person is protected from unfair dismissal at a time if, at that time:

(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and

(b) one or more of the following apply:

(i) a modern award covers the person;

(ii) an enterprise agreement applies to the person in relation to the employment;

(iii) the sum of the person’s annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.”

[22] There is no dispute, and I am satisfied the Applicant has completed the minimum employment period but is not covered by an award or enterprise agreement. It was submitted that his salary, at termination was $75,000 per annum, not with-standing the dispute about what he was actually paid. He was therefore below the high income threshold. Consequently, I am satisfied the Applicant was protected from unfair dismissal.

Was the dismissal unfair?

[23] A dismissal is unfair if I am satisfied, on the evidence before me, that all of the circumstances set out at s.385 of the Act existed. Section 385 provides the following:

“385 What is an unfair dismissal

A person has been unfairly dismissed if the FWC is satisfied that:

(a) the person has been dismissed; and

(b) the dismissal was harsh, unjust or unreasonable; and

(c) the dismissal was not consistent with the Small Business Fair Dismissal Code; and

(d) the dismissal was not a case of genuine redundancy.

Was the Applicant dismissed?

[24] A person has been unfairly dismissed if the termination of their employment comes within the definition of “dismissed” for purposes of Part 3–2 of the Act. Section 386 of the Act provides that:

“386 Meaning of dismissed

(1) A person has been dismissed if:

(a) the person’s employment with his or her employer has been terminated on the employer’s initiative; or

(b) the person has resigned from his or her employment, but was forced to do so because of conduct, or a course of conduct, engaged in by his or her employer.”

[25] There is no dispute that the Applicant was dismissed and that subsection 385(d) does not apply. However, the application of the Small Business Fair Dismissal Code (the Code) is squarely at issue in this case. Compliance with the Code is a defence to an unfair dismissal claim.

[26] Section 388 provides for the Minister to declare the Code by legislative instrument. This was done on 24 June 2009.

[27] The Code provides:

“Small Business Fair Dismissal Code

Commencement

The Small Business Fair Dismissal Code comes into operation on 1 July 2009.

Summary Dismissal

It is fair for an employer to dismiss an employee without notice or warning when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft, fraud, violence and serious breaches of occupational health and safety procedures. For a dismissal to be deemed fair it is sufficient, though not essential, that an allegation of theft, fraud or violence be reported to the Police. Of course, the employer must have reasonable grounds for making the report.

Other Dismissal

In other cases, the small business employer must give the employee a reason why he or she is at risk of being dismissed. The reason must be a valid reason based on the employee’s conduct or capacity to do the job.
The employee must be warned verbally or preferably in writing, that he or she risks being dismissed if there is no improvement.

The small business employer must provide the employee with an opportunity to respond to the warning and give the employee a reasonable chance to rectify the problem, having regard to the employee’s response. Rectifying the problem might involve the employer providing additional training and ensuring the employee knows the employer’s job expectations.

Procedural Matters

In discussions with an employee in circumstances where dismissal is possible, the employee can have another person present to assist. However, the other person cannot be a lawyer acting in a professional capacity.
A small business employer will be required to provide evidence of compliance with the Code if the employee makes a claim for unfair dismissal to Fair Work Australia, including evidence that a warning has been given (except in cases of summary dismissal). Evidence may include a completed checklist, copies of written warning(s), a statement of termination or signed witness statements.”

[28] Section 396 provides that certain matters, one of which is the Small Business Fair Dismissal Code must be determined by the Commission, before proceeding to deal with the merits of a matter. It provides:

“396 Initial matters to be considered before merits

The FWC must decide the following matters relating to an application for an order under Division 4 before considering the merits of the application:

(a) whether the application was made within the period required in subsection 394(2);

(b) whether the person was protected from unfair dismissal;

(c) whether the dismissal was consistent with the Small Business Fair Dismissal Code;

(d) whether the dismissal was a case of genuine redundancy.”

[29] It follows that if I determine that the Applicant’s dismissal was consistent with the Code I do not need to consider whether the dismissal was harsh, unjust or unreasonable. If I consider the dismissal was not consistent with the Code it will be necessary to consider the matters contained in s.387 which provides:

“387 Criteria for considering harshness etc.

In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable, the FWC must take into account:

(a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and

(b) whether the person was notified of that reason; and

(c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and

(d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and

(e) if the dismissal related to unsatisfactory performance by the person—whether the person had been warned about that unsatisfactory performance before the dismissal; and

(f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal; and

(h) any other matters that the FWC considers relevant.”

Case for the Applicant

[30] The Applicant submits that his summary termination was unfair, unjust and unreasonable because he was not guilty of serious and wilful misconduct. As well, he was not provided with a reasonable opportunity to respond to the allegations.

[31] The Applicant submits that he was given autonomy to perform his role but the Respondent’s Executive were aware of the accounting processes used. He acknowledges that these were “imperfect”.

[32] The Applicant says he underpaid himself but used the credit card for personal use as an offset. A new Committee and Auditor took over in September 2013 but he was not directed to change his practices. Further, he was not provided with the records that would have facilitated his refutation of the allegations. His defence is that his actions were authorised by the Respondent.

[33] The Applicant submits that the Respondent did not formally advise him that he was under investigation when he was stood down. Rather, a decision was taken to remove the Applicant as part of a political and personal vendetta before he had any opportunity to respond to the allegations.

[34] The Applicant’s evidence was that his employment arrangements were agreed with the past President, Mr Brian Hunter, and not initially put into a written contract. His salary was to be $75,000 per year.

[35] However, he only took $52,000 per annum. He understood that it was accepted that he would make up the difference in other ways. He purchased a motor vehicle in October 2010 which he used for the job. He says the Respondent’s Executives agreed to the salary arrangement. (Transcript PN215 - PN231)

[36] The Applicant says that all work related expenses, including travel and motor vehicle expenses were to go on the corporate credit card. In addition, he says that the Executive, Mr Ongley in particular, were aware that personal expenses went on the work credit card. He admits that after the appointment of a new auditor in late 2013 issues around the use of the credit card were raised with him. In March 2014, he was requested by Mr Clowes to stop using the credit card for personal use. However, it appears that the system did not change because the Executive did not put in place an alternative system. Prior to June 2014 he was not told that he had done anything wrong. Under cross-examination he detailed the personal expenditures (Transcript PN308 - 344) but justified this on the basis of money owing to him. (Transcript PN534 - PN555) His explanation of the credit card use is shown in this response to questions asked by me:

“PN584
So your evidence is that the expenses authorisation forms, if I can just describe them as that - this is exhibit P4. Your evidence I think was that really they weren’t used very much. Is that a fair summary?---We generally used them only for a record of expenses. The actual authorisation side of things wasn’t actually carried out. We used them more to keep a record, a good record.

PN585
I would assume they don’t exist for each of the credit card payments, of which there were many, presumably?---No.

PN586
So you purchased whatever you purchased, you signed a credit card, you got a monthly statement from MasterCard, and then who reconciled the monthly statement against the receipts that you get when you - - - ?---Yes, that’s the financial officer did that.

PN587
And then what happened after that?---She’d come to me with basically a P and L side of things showing me where the balance was at and I’d look at my personal stuff and just take it out, pay it off, or it would be in a situation where I didn’t have to, depending upon how much travel I’d be doing.

PN588
I can understand about utilisation of vehicles for work purposes and petrol and what’s authorised and what’s not authorised and what’s within your employment or not perhaps, but issues such as we have seen such as school fees and purchases at JB Hi-Fi in Hobart and vet bills and so on. You’re saying that that sort of expenditure was authorised by the employer?---It was my understanding, sir, that there was a credit that remained and it was my money essentially. I hadn’t drawn it out to so therefore it was there to be used.”

[37] The Applicant’s evidence was that the credit card was reconciled by Ms Gambetta who essentially checked that he had not exceeded his salary cap. She had never raised any problem with him.

[38] In his evidence, Brian Hunter outlined the employment agreement which he entered into with the Applicant. It was not a formal contract but the salary was to be $75,000 with overtime in the form of time in lieu. He supported the Applicant’s submission that he was not provided with sufficient information during the process prior to his dismissal. However, there was no suggestion that the credit card would be used for personal expenses. There was to be a motor vehicle allowance of 75 cents per kilometre, yet motor vehicle expenses were being charged to the credit card. He denied that he had authorised a lesser salary (Transcript PN653 - PN657)

Case for the Respondent

[39] The Respondent submits that its actions were consistent with the Code. The report of David Young of Azimuth Partners gave it sufficient grounds for a reasonable belief that the Applicant had engaged in fraud and theft. This was reported to the Police on 27 August 2014.

[40] The Respondent submits that the allegations were put in writing to the Applicant who had every opportunity to respond. A meeting took place at which the Applicant had a support person.

[41] The Respondent points out that not one witness, including Mr Hunter who appeared for the Applicant, supported the Applicant’s contention that his personal use of the credit card was authorised by the Respondent or any of its officers.

[42] The Respondent also relies on the contract of employment executed in February 2013 which set aside any previous arrangements. It provided any misuse of the Respondent’s resources would result in termination.

[43] Exhibits P1, P2 were the credit card statements. Without being exhaustive, they show that it was used for:

● Motor vehicle expenses

● Veterinary bills

● School fees

● Pharmacy bills

● Numerous additional items of personal expenditure

[44] The employment contract of 27 February 2013 (Exhibit P7) specifies a $75,000 per annum salary. There is no reference to expense payments, credit cards or any other relevant matter.

[45] Martin Ongley, President of the Respondent from 2012 to 2014, was adamant that he never gave the Applicant the authority to use the credit card for personal expenses. A financial investigation was undertaken in 2014 because of the inability to reconcile the accounts, rather than a personal campaign against the Applicant. (Exhibit P10)

[46] Jarrod Clowes’s evidence (Exhibit P9) was that he had started to be concerned about the Applicant’s wages and expense payment when, as Acting Treasurer, in August 2013 he could not make sense of the accounts presented by the Applicant. He then found about the clearing account. He also found, through the questioning of Ms Gambetta, about the credit card being used for various personal items by the Applicant. He repeatedly told the Applicant to stop this practice from early 2014. The Applicant was uncooperative in rectifying this situation. This evidence was reinforced in cross-examination. (Transcript PN1058 - PN1072)

[47] The professional financial investigation was undertaken following the 30 May letter which instructed the Applicant to take leave. It is clear that there were genuine health issues which the Applicant was dealing with. The report from David Young was received on 8 July 2014. The Executive then decided to ask the Applicant why his employment should not be terminated. It is apparent that Jarrod Clowes, in particular, tried to give the Applicant the benefit of the doubt and reach some compromise which involved the repayment of an agreed amount (PN1304 - PN1320). David Young’s report ended any possibility of that occurring.

[48] A copy of David Young’s report was attached to his statement (Exhibit P11). It confirms the extensive private use of the credit card. It also confirms that a kilometre rate for the motor vehicle was received by the Applicant as well as all vehicle expenses being paid for with the credit card. There was also a salary sacrifice arrangement that should have been taxed as income or attracted Fringe Benefits Tax. The signatories for all payments were the Applicant and Ms Gambetta. He also concluded that a number of cash payments were made for items of personal use and the Respondent’s accounts were used to pay for personal items. For example, the Applicant’s daughter’s mobile phone was on the Telstra account. There was also systematic over claiming of the kilometre allowance.

[49] In summary, the report of David Young estimated the Applicant had used $155,222.04 of the Respondent’s funds for his personal advantage and without proper authority. When repayments through the clearing account were deducted, $84,262.56 was left as the outstanding debt. The report also details possible taxation liabilities that the Respondent was exposed to through the Applicant’s actions. Finally, it recommends a range of future actions including:

● Termination of the Applicant

● Reports to the Police and other relevant authorities

● Implementation of appropriate financial controls and accounting practices

In oral evidence David Young added

“PN1495
Could you explain or elaborate on what you have put in point 4, paragraph 4 with regard to the motor vehicle?---Okay. The practice that went on within the accounts in my investigations was that a number of expenses were debited or expensed against the Mark Rowe clearing account. To offset those expenses, there were various travel claims made and those travel claims were on a kilometre basis at varying rates. Those amounts were said to offset various debits against that clearing account. At the same time that those expense claims were being made or those mileage claims were being made for the purposes of reimbursing Rowe for costs incurred and using his own personal vehicle, the SAAA was then carrying expenditure on his vehicle's fuel, repairs, maintenance, and so on. So in other words, whilst the SAAA fully maintaining the vehicle belonging to Rowe, Rowe was then claiming further claims against the SAAA

PN1496
In point 3, how did you determine which transactions on the credit card were for private expenses and how did you determine that?---The determination is made on a number of bases. The first was at the commencement of our investigation, we sought policies surrounding the use of the credit card. We sought the procedures adopted in recording transactions to the credit card and it was at that point we were instructed that when Mark's credit card was used, any expenses which were to be claimed by the SAAA, a docket or voucher was provided. Any expense which was Mark Rowe's personal expense, no voucher was provided and those transactions were recorded against the Mark Rowe clearing account.”

[50] Philip Hale (Exhibit P13) gave a detailed account of the process undertaken after the Young report was received by the Executive of the Respondent. The teleconference with the Applicant on 18 July 2014 lasted for over two hours. All the allegations were put to the Applicant and all information and documentation requested was provided. The Applicant’s defence was a vague assertion that the arrangements had been authorised by Executives of the Respondent. In any event, he points out that the contract of February 2013 replaced any previous arrangements.

The Commission’s Approach to the Code

[51] The Code states that it is not unfair for a small business employer, such as the Respondent, to summarily dismiss an employee when the employer believes on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal. Serious misconduct includes theft and fraud. A report to the Police, on reasonable grounds, is sufficient for the dismissal to be considered fair.

[52] In Khammanaeechan v Nanakhon Pty Ltd [(2010) 204 IR 39] Deputy President Bartel found that the Commission is not required to determine whether there is a valid reason for the dismissal where the Code applies. The test is whether there were reasonable grounds for the employer’s conclusion that dismissal was appropriate. The knowledge of the employer at the time of the dismissal and the reasonableness of the investigation are the relevant factors. The Deputy President stated:

“[61] At the outset it is appropriate to note that unlike a consideration of the dismissal of an employee of a business that is not a small business employer, the function of FWA is not to determine on the evidence whether there was a valid reason for dismissal. That is, the exercise in the present matter does not involve a finding on the evidence as to whether the applicant did or did not steal the money. The application of the Small Business Fair Dismissal Code involves a determination as to whether there were reasonable grounds on which the respondent reached the view that the applicant’s conduct was serious enough to justify immediate dismissal. As such, the determination is to be based on the knowledge available to the employer at the time of the dismissal, and necessarily involves an assessment of the reasonableness of the steps taken by the employer to gather relevant information on which the decision to dismiss was based.

[62] I consider that the investigation conducted by the employer to obtain the details of the amounts stolen and the means by which the money was stolen was sufficient to provide a basis on which to interview the applicant in relation to the theft. Unfortunately the applicant put up nothing in his own defence and, on the contrary, appeared to accept responsibility for the stolen money. While the applicant did not confess to the theft, neither did he provide any basis on which the respondent could reasonably reach any alternative view.
. . .

Procedural issues

[70] I am not persuaded by the submission that the Small Business Fair Dismissal Code requires that an employer must invite an employee to have a representative present. The relevant words in the Small Business Fair Dismissal Code that “… the employee can have another person present to assist” are permissive in nature and confer a right that the employee may choose to exercise. The obligation on the employer is to not frustrate that right if the employee chooses to exercise it. This begs the obvious question as how an employee of a small business is to know that such a right exists, but that is not a matter for consideration here.”

[53] Deputy President McCarthy summarised the approach in Harley v RosecrestAsset P/L t/a Can Do International [2011] FWA 3922 as follows:

[8] For an employer to believe on reasonable grounds that the employee’s conduct is sufficiently serious to justify immediate dismissal, it is firstly necessary for the employer to establish that the employer did in fact hold the belief that as a matter of fact that (i) the conduct was by the employee; (ii) the conduct was serious; and (iii) that the conduct justified immediate dismissal. This is to be contrasted to the provisions of s.387(a) where FWA, in determining whether there was a valid reason for the dismissal, must find whether the conduct in fact occurred.

[9] Secondly, it is necessary for the employer to establish that there are reasonable grounds for the employer holding the belief. It is thus necessary for the employer to establish a basis for the belief held which is reasonable. In this regard it would usually be necessary for the employer to establish what inquires or investigations were made to support a basis for holding the belief. It would also ordinarily be expected that the belief held be put to the employee, even though the grounds for holding it may not be. Failure to make sufficient inquiries or to put the accusation to the employee in many circumstances might lead to a view that there were no reasonable grounds for the belief to be held.

[54] The Full Bench in John Pinawin t/a RoseVi.Hair.Face.Body v Mr Edwin Domingo[2012] FWAFB 1359 endorsed the approach in both of these cases:

“[29] We believe that the approach and observations in these two decisions are correct. There are two steps in the process of determining whether this aspect of the Small Business Fair Dismissal Code is satisfied. First, there needs to be a consideration whether, at the time of dismissal, the employer held a belief that the employee’s conduct was sufficiently serious to justify immediate dismissal. Secondly it is necessary to consider whether that belief was based on reasonable grounds. The second element incorporates the concept that the employer has carried out a reasonable investigation into the matter. It is not necessary to determine whether the employer was correct in the belief that it held.

[30] Acting reasonably does not require a single course of action. Different employers may approach the matter differently and form different conclusions, perhaps giving more benefit of any doubt, but still be acting reasonably. The legislation requires a consideration of whether the particular employer, in determining its course of action in relation to the employee at the time of dismissal, carried out a reasonable investigation, and reached a reasonable conclusion in all the circumstances. Those circumstances include the experience and resources of the small business employer concerned.”

[55] In Steri-Flow Filtration Systems (Aust) Pty Ltd v Craig Erskine[2013] FWCFB 1943 a Full Bench overturned the decision at first instance because it found that the employer’s belief that the employee’s conduct was sufficiently serious to justify immediate dismissal was based on grounds directly supported by or reasonably inferential from the investigation it had conducted. It held that the investigation carried out was reasonable and that the termination was consistent with the Code.

Conclusion

[56] Applying the approach of the Commission to cases involving the Code, as summarised above, I am satisfied that the Respondent’s dismissal of the Applicant was consistent with it.

[57] I am satisfied that the Respondent had a belief on reasonable grounds that the Applicant’s conduct was sufficiently serious to justify immediate dismissal. The matter involved theft and fraud and was reported to the Police on 27 August 2014. The use of a business card for extensive personal use without authority clearly comes within the ambit of the Code. Any person in a position of responsibility should know that this is not acceptable and exposes them to dismissal by their employer. It falls within the definition of serious misconduct in Regulation 1.07.

[58] I am also satisfied that the Respondent carried out an appropriate investigation, including by engaging David Young of Azimuth Partners to provide expert financial analysis and advice. He concluded that $84,262.56 was owed by the Applicant to the Respondent.

[59] The Applicant submits that the process undertaken by the Respondent was faulty because he was not aware that there were allegations against him. However, the 30 May 2014 letter made it clear that there were issues of concern that were being looked at. Hence, the Applicant’s solicitor wrote to the Respondent on 13 June 2014 seeking clarification of the position.

[60] It was entirely appropriate for the Respondent to engage professional accounting advice to prepare a report on the financial issues and make recommendations as to their remedy. There is no evidence that this was a device to bolster a decision to dismiss him that had already been made.

[61] The Applicant relies on the fact that he did not have financial training and that the systems and policies of the Respondent were inadequate. There is no doubt that the practices were sloppy, to say the least. However, the Applicant was the General Manager and therefore he had a responsibility to take action to remedy this. An accounting degree is not necessary for an employee to be expected to know that use of a corporate card for personal use is inappropriate.

[62] The evidence is clear and uncontested that the work credit card was used for a whole range of personal items by the Applicant. The Applicant submits that his personal use of the credit card was authorised by the Respondent and its Executive. However, all of the evidence is against this. Even Brian Hunter denied that he had authorised personal use of the credit card. The evidence of the other Executives was consistent on this point. They also denied that there was any agreement to create a salary credit to cover private purchases.

[63] Moreover, the Applicant accepted that he had been “double dipping” in his claiming of the motor vehicle allowance and the use of the credit card for motor vehicle expenses. (Transcript PN45 - PN46; PN380 - PN384).

[64] Even if the Applicant is given the benefit of the doubt and a view is taken that there was no deliberate intention to defraud the Respondent, the Applicant acted without any regard for the best interests of his employer. He should have known that his actions were inappropriate, likely to lead to financial loss to the Respondent and expose himself to potential dismissal.

[65] The Applicant had a reasonable opportunity to respond to the allegations made against him. The “show cause” letter of 14 July clearly set out the allegations against him and he was provided with further material which he requested. The report of David Young sets out all of the issues and evidence clearly and convincingly. The teleconference meeting on 18 July was lengthy and the Applicant had a support person, Brian Hunter, in attendance. I am satisfied that the Applicant had a reasonable opportunity to respond to the allegations against him.

[66] The Applicant’s case paid little attention to the contract of employment signed in February 2013. Whatever arrangements existed or were thought to exist by the Applicant, they were replaced by the contract. It is also clear that Jarrod Clowes requested the Applicant to stop using the credit card for personal use from March 2014 on a number of occasions. The Applicant did not comply.

[67] In reaching my decision I have not taken into account the material produced by the Respondent after the hearing and sent to my chambers on 4 February 2015, with respect to the Applicant’s salary. Its use was challenged by the Applicant on the basis of accuracy. It is not necessary, in any event, for me to rely on it to reach the conclusion that I have arrived at.

[68] For the above reasons I determine that the termination of the Applicant’s employment was not unfair, as defined by s.385, it was consistent with the Small Business Fair Dismissal Code. The Applicant’s application for an unfair dismissal remedy is dismissed.

DEPUTY PRESIDENT

Appearances:

A. Bland, solicitor for the Applicant.

G. Power, solicitor for the Respondent.

Hearing details:

2014

Sydney:

October 28 (teleconf)

December 9 (teleconf) 16, 17.

Final written submissions:

Applicant: 10 February 2015;

Respondent: 20 February 2015;

Applicant in reply: 6 March 2015.

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<Price code C, PR561407>